surprises

[dory36]

Hmmm -- hadn't thought about these sorts of surprises much, as we've never owned a house more than a few years, what with our itinerant lifestyle.

We had been thinking of buying eventually (years in the future, after boating is out of our system), but the tradeoff between buying and renting is not all that big, and this sort of potential liability sure seems like something to consider!

Dory36

 

[cute fuzzy bunny]

Ah a crawl space and heavy lifting involved.

Just to throw something out, theres no need to pay an expensive contractor to dig, or to do it yourself. You might consider having a pest contractor come out and pay them to tell you what NEEDS to be done to make the house safe and extend its life, if you plan to stay a while. When you sell it, most states require pest damage to be repaired prior to sale. But if you're going to continue to live in it, stopping further damage and making the place safe to live in is all thats needed.

Once the pest contractor gives you the roadmap, you can hire grunts to do any basic digging and perhaps a retired (!) carpenter to replace some of the wood. Anything involving jacking up the house or replacing multiple structural members should be performed by a pro. That having been said, its not rocket science to set a fresh 4x4 stud next to one thats been nibbled on and nailing it in.

Once you have things opened up and can assess the damage, a fumigation company can "tent" the house and kill off the evil critters.

Re: pressure treated lumber: you cant use this in construction thats inside the home, and as of 12/31 of last year its no longer legal to manufacture the old style 'green' wood that has arsenic in it.

One last suggestion, you can buy "stakes" to drive into the yard that are filled with a bait for subterranean termites. When they find it they try to move in to the interior of the stake and eat the bait. Kills the whole mess of them. Periodically you pop off the stakes cap and refill it with bait. Good prevention.

 

[cute fuzzy bunny]

I completely forgot about this, but perhaps it'll help. I was just chatting with a realtor friend and she suggested that you find a good local realtor, either someone you know or a friend knows. Many good realtors keep a string of low cost contractors for their sellers to use during the closing process.

A couple of houses ago the home I was selling had a lot of minor dry rot trim and some portions of the deck that needed replacement. I did most of the dry rot work and the realtor brought in a couple of young guys, licensed and insured, and they did the 2nd story work and the structural work on the deck for half the cost I had been quoted by the pest company. She keeps a cheap painter, carpenter and handyman around, if they start upping their rates she finds another one.

Might be worth a look.

 

[sgeeeee]

Hi frugal,

I have been trying to avoid second guessing your $50,000 repair estimate because I realize that without being there and seeing what you have, I can never fully understand the whole problem. But I do find that figure very hard to understand. I've seen some fairly serious modifications made to structures with crawl spaces for far less than that amount.

My inclination is to believe that you've talked to a contractor who might be excellent at building certain types of structures, but may not be familiar with the kind of creative solution that could solve your problem more cheaply. This kind of thing (on a much smaller scale) happened to me several years ago when I was selling a house. I had already moved out of the city where the house was for sale and the termite inspector had failed the house because of the way I had attached a fence gate to the side of the house. The real estate agent thought he would do me a favor and get a contractor to give an estimate for the work needed to comply with the code. That estimate came in at just over $400. I checked on the code and asked a friend to go over and make a minor modification. He said it took him less than 20 minutes to do the modification and everything passed. The whole think only cost me a six-pack the next time I was in town (and I got to share the beer).

I don't mean to imply that your problem is this simple, but for $50,000 I think I could suspend a whole wing of a house on jacks, tear out the lower portion, poor an acceptable foundation, replace needed material and still have considerable money left over. Even at $50/hour, that figure represents about 1/2 man year of labor. But since most of the work is unskilled, it probably represents closer to a full man year of effort. Subtract materials cost from it and it still leaves an awful lot of work.

If you've talked to a number of people and they all come up with similar estimates, then you should probably just pass my thoughts off as misguided and ignorant. (That's what most posters on this board do with all my posts ) But if you haven't pursued alternative estimates though other channels (as suggested by TH) then you might find it worth it.

 

[Cut-Throat]

If you've talked to a number of people and they all come up with similar estimates, then you should probably just pass my thoughts off as misguided and ignorant. (That's what most posters on this board do with all my posts )

No, I think you've got a real point here. The quote does seem a bit high, and I'm sure it can be done cheaper!

As far as your thoughts, I think you are one of the most intelligent posters on this forum. I especially agree with your post on immigrants. A lot of people have a knee jerk reaction that immigrants are a problem. The facts show otherwise and you are knowledgeable in this area. I am far more worried about US companies shipping jobs overseas than importing labor into this country. At least they have to conform to U.S. laws. Once the jobs go over seas, they can employ children and adults at 29 cents per hour!

I like to hear about your backround. Were you a professor? You mentioned in another post about living abroad - I believe.

 

[sgeeeee]

A lot of people have a knee jerk reaction that immigrants are a problem. The facts show otherwise . . . I am far more worried about US companies shipping jobs overseas than importing labor into this country. At least they have to conform to U.S. laws. Once the jobs go over seas, they can employ children and adults at 29 cents per hour!.

Exactly. Globalization is going to happen whether we put up a fence around the boarder or not. If we're smart, we will encourage all the brightest, most industrious people from around the world to come here and be part of our team -- instead of using that talent to compete with us.

I like to hear about your backround. Were you a professor? You mentioned in another post about living abroad - I believe.

I did do about three years as a professor right after a brief post-doc tour in Italy. Although I enjoyed teaching and found it personaly rewarding, I also found that teaching was a very small part of the job of professor. I did not find the other parts of the job very satisfying. And, of course, the professor job paid far less than industry was willing to pay me. I spent 19 years as an electrical engineer, although the last 6 or 8 years was as an engineering director -- which means I was more of a spritual leader than a technical worker. I stayed in the research/development end of things throughout my career and put a lot of effort into publishing and professional activities. Those activities paid off in terms of international recognition and I took advantage of a lot of invitations to travel to meetings and conferences around the world.

I had originally planned on retiring in April 2001 (when I became vested in a company pension plan). The economy at that time made me nervous, though, so I ended up working 2 extra years. I enjoyed the things I was able to do during my career, but I really do like retirement better.

 

[Telly]

The back of the house is not constructed with pressure treated wood and directly on the ground.  So options are to start digging myself or pay someone to lift the house and put a proper basement under it.  The 50,000 is for a house lifting, new basement etc. [\quote]

Hi frugal,

If your house was built on timbers on the ground, then I understand the $50,000 now. It is a big job to lift an existing damaged structure, and do all the work required. Houses are built from the bottom-up. But this type of work is done the other-way 'round. I have done jacking and major sill and joist work on a house that was initially built on timbers. It had been raised and settled down on knee walls years before I worked on it. But a lot of the damage from soil contact had not been repaired - sills collapsing, joists compressing on the outer ends. So I jacked, replaced, or sistered everything affected. Long term, keeping wood dry and away from the soil is the only solution.

A full basement doesn't have to be the solution, unless you want the space. A crawlspace can solve problems. Short concrete sidewalls, sitting on footings below the frost line, concrete piers for girder support, and a concrete floor for the crawlspace. The concrete floor can be thinner than a basement floor, but should have reinforcing mesh, and be poured over a continuous 6 mil thick plastic vapor barrier. Crawl spaces can get into trouble with venting, depending on where in the country you are. As they are not living space, their needs are easily forgotten about. In northern climates, there should be airflow from outside in the warmer months. In colder months, they can be closed up, if the moisture barrier is pretty good.

I also noticed the build costs per square foot you mentioned! An expensive area... and an expensive area almost always means expensive labor costs too. In a major job like that, SOMEONE needs to be responsible for the finished job, and its trouble-free survival. Which means someone who has done it in your area before, who has a good track record over the years. Who can handle the unexpected, as with existing construction unexpected is always discovered during the job. And those people are not bargain basement (no pun intended!). And they use subcontractors that they trust and have built a relationship with over the years. Avoid lowballers!

Good luck with your project

 

[Ted]

Looks like Ted resolved to be a tax-griping curmudgeon this year  

If you don't like how tax dollars are spent, check into Roth IRAs, municipal bonds, and the 15% tax rate on LT cap gains and dividends.

I apologize to frugal if I appeared to accuse him of trying to rip-off the taxpaying public just because he lives in a state where there is a lot of support for government subsidies -- especially those that benefit commuters in Boston.

In looking at the "big picture," I recognize the truism that whatever government spends to "help" one person must, in some manner, come out of the pockets of everyone else.  Thus, whatever the rest of us pay in taxes to "help" corn growers in Iowa, or commuters in Boston, or commercial fishermen (many of them, again, in Massachusetts!) reduces the purchasing power that we can use to meet our individual wants and needs, such as buying a boat, correcting termite damage, or whatever.  It is impossible for the U.S., as a society, to subsidize itself, and a lot of waste and unfairness is created by government programs that purport to do so.

Tax-advantaged investments are actually another form of subsidy that make a lot of sense for the individual, while being of dubious value for the overall economy.  Every tax dollar that one individual saves by investing in a tax advantaged plan must be raised by government by taxing something else more heavily.  Even those who "save" on one type of tax end up paying more through some other ones.  

The bottom line is that I'm not against government expenditure for things like national defense, environmental protection, and social security/medicare that benefit everyone (or will in the future), nor am I against the taxes required to pay for these services.  But I am very reluctant to support programs that represent subsidies to special interest groups who are no more "needy" than the general population. And I try to get these principles incorporated in government policy by supporting people like John McCain who understand and apply them.

 

[unclemick]

I believe some old dude (James Madison?) griped about taxing broadly and spending narrowly. I don't think anything has changed much except the actors(politicians).

 

[sgeeeee]

. . . But I am very reluctant to support programs that represent subsidies to special interest groups who are no more "needy" than the general population.  And I try to get these principles incorporated in government policy by supporting people like John McCain who understand and apply them.

Where do you stand on the home mortgage tax break?

I like John McCain too (although I tend to support Democrats over Republicans most of the time) and am fortunate enough to live in Arizona where I get to vote for him occasionally. I ask the question about home mortgage because that is one law that tends to make otherwise fiscal free-market types become a tad hypocritical. I haven't heard even John McCain talk about this sacred cow.

 

[Ted]

Where do you stand on the home mortgage tax break?

I ask the question about home mortgage because that is one law that tends to make otherwise fiscal free-market types become a tad hypocritical.  I haven't heard even John McCain talk about this sacred cow.

There are a lot of reforms that I would make to the tax code that I regard as "no-brainers," but this is more complex.

The "short answer" in favor of the home mortgage deduction is that it keeps the cost of home ownership on a par with the cost of renting, given the fact that landlords are able to write off the cost of the interest that they pay to own rental property, and this gets passed on to the renters.

For people who are somewhat "progressive" in their views of taxation, the problem with the deductibility of mortgage interest is that it is a greater benefit for people who have large mortgages on expensive houses (and are presumably wealthier) than for people who own modest houses and have them paid off. (As I noted in another post today, I'm sort of "gaming" this myself, and I don't claim to need the tax break.)

I'm sure that there are all sorts of interests who would scream that the elimination of the mortgage interest deduction would destroy people's chance to "own their own homes" and have the streets packed with homeless families. What would actually happen is that the price of housing would drop (and the construction of new housing would slow) in response to the reduced demand for it. People would still fill up the housing stock, but on the average would live in smaller, less expensive houses.

The flip side of the issue, however, is that the increased revenues to government would allow other taxes to be reduced. This would increase consumers' demand for everything other than housing, and more of everything else would be produced (at a higher price) to meet that demand.

Would this be "good" or "bad"? Well, housing is kind of a "sacred cow" that is favored by government policy. I could cite various advantages and disadvantages to this bias, but a major disadvantage is this: Encouraging home ownership also means encouraging larger homes on larger lots and the resultant urban sprawl. And that means that more energy is required for home heating and cooling as well as for commuting. As someone who is extremely concerned about this country's piggish consumption of fossil fuels -- for economic, environmental, and national security reasons -- I think that we need to discourage all habits that involve wasteful consumption of fossil fuels. And the most effective and efficient way of doing this is would be to gradually shift the tax structure onto taxation of fossil fuels. A compromise approach to the home mortgage interest deduction would be to put a cap on the amount that could be deducted.

 

[John Galt]

I agree with Ted that housing is kind of a "sacred cow"
with government, or maybe I should say "home
ownership". I also think the government is
"anti-landlord" generally, unless the landlord is the government. Whenever I see these extreme
measures to put people into "a home of their own"
it makes me wonder. For example, I think Habitat for
Humanity is mostly just a "feel good" project for bored
liberals (Look, we built you a house!) In the big scheme of things it means nothing. End of rant...........

John Galt

 

[wzd]

As someone who is extremely concerned about this country's piggish consumption of fossil fuels -- for economic, environmental, and national security reasons -- I think that we need to discourage all habits that involve wasteful consumption of fossil fuels. And the most effective and efficient way of doing this is would be to gradually shift the tax structure onto taxation of fossil fuels. A compromise approach to the home mortgage interest deduction would be to put a cap on the amount that could be deducted.

I very much agree. I think that the home mortgage deduction for low and middle income is good, but there should cease to be a benefit once basic housing levels are reached.

I also think we should move to pricing that includes costs of cleanup as part of the initial price. Such an attitude is already in place in Europe, but not here yet. And although I very much enjoy the benefit, gas is way too cheap!

Wayne

 

[John Galt]

Speaking of surprises.................although I have little
(or maybe partial) control over many of my expenses/
obligations, I have total control now over how much taxable income I take each year. Thus, I am quite capable of reducing my federal tax bite to -0-. This
never crossed my mind back when I ERed. In fact,
I was looking around for states with no income tax
which (as it turns out) is sort of a non-issue now.

John Galt

 

[cute fuzzy bunny]

I havent paid state or federal income taxes for the last 2 years, and I shouldnt have to pay any (or much) for at least another 4-5. Thats not a surprise, but its verrrry pleasant.

After several years of writing 6 figure checks to the state and feds, all the while forcing a grin on my face and muttering "I need to be happy I made enough money to have to pay this much in taxes. I really need to!", its great fun to send in the "no tax this year" forms.

 

[Bob_Smith]

After several years of writing 6 figure checks to the state and feds...

My taxes are in the 6 figures too, if you count the cents after the decimal point.

 

[wabmester]

I havent paid state or federal income taxes for the last 2 years, and I shouldnt have to pay any (or much) for at least another 4-5.  Thats not a surprise, but its verrrry pleasant.

What's your secret? I've got capital loss carry-forwards, charitable deduction carry-forwards, most of my income last year was from tax-free munis, deductions aplenty, and I still have a sizeable tax bill.

 

[cute fuzzy bunny]

Easy. I'm carrying six figure short and long term losses, so any gains are easily offset, and I'm taking the $3000 deduction against ordinary income. That should continue for some time because I'm not selling any investments, just taking dividends now that i'm re-invested. Some of my realized income is tax free. Very substantial charitable deductions. The taxable realized ordinary income for the last 2 years minus the 3k keeps me about thisclose to the non-taxable range. Plus I've been mostly in cash and just sipping from the checking account for the last few years. I made some money off of some holdings in REITS and a couple of balanced funds, but still nothing really huge. My biggest pickup this year was trading the McMansion for the smaller house and taking a tax free $250,000 gain on the sale of my old property. I managed to buy at the bottom of a 10 year real estate slide in the Sacramento area and sold near (I think) to the top.

So in short, my secret is having lost half my shirt and part of my pants in 2000, while still keeping most of the portfolio wardrobe intact, plus a little tax free income and mostly staying out of the game and not spending a lot of money for a while. Plus donating half my stuff when I moved into a smaller house, which is a non-repeatable deal.

I'll be close to paying a little tax this year, and may quite likely pay some next year. But thats ok with me